Introduction

As a credit union committed to serving the dynamically changing landscape of Montana, Sky Federal Credit Union (FCU) has seen both ends of the liquidity spectrum. In the wake of 2020 stimulus payments and a sudden influx of population growth in the region, the credit union experienced a 30 percent uptick in deposits overnight. Conversely, 2023 came with liquidity concerns and a strong desire to grow loans efficiently, and the credit union knew they needed a partner that could adapt to the highs and lows of the macro environment.

The Challenge: Competing as a small credit union

Ben Kuss, VP of Sales, Service and Marketing, acknowledged the hurdles smaller credit unions face in finding the right partner, especially in the wake of interest rate changes, compliance challenges and ever-growing competition from nationwide financial institutions. Leadership at Sky FCU identified key technical capabilities they needed in a partner with Upstart, including a 24/7 digital presence and quick financial decisions, all while maintaining their lean staff. Like many other credit unions, Sky also faced liquidity issues and needed to make the most of its remaining liquidity by maximizing returns. Kuss explained, “Everything I’ve ever seen is grow, grow, grow — and we need to do so effectively. Growing loans has been the mission, and we’re still trying to grow loans.” With the Upstart Referral Network, Sky had the flexibility to adjust loan parameters, including volume, returns and more, as macro conditions changed, giving them the flexibility they desired in a partner.

Getting the Sky team on board

The transition to fintech wasn’t an overnight decision, and Kuss emphasized the importance of addressing concerns within the team and board of directors. By communicating the partnership’s objective to provide members and communities with enhanced services, particularly in regions without physical branches, the Upstart partnership gained support.

Growing beyond branch constraints

Six months into their partnership with Upstart, Sky FCU originated $1.1M in loans, a feat Kuss explained would have taken five to ten years in-house. Kuss explained that with the efficiency gained through Upstart, the credit union has been able to identify opportunities beyond the initial approval. In fact, Sky has gained 100 new members since partnering with Upstart.

A bright future ahead

Looking ahead, Sky FCU aims to continue growing loans, deposits and members more efficiently and with reduced expenses. With an average APR of approximately 13.5 percent across its portfolio, the credit union is well-positioned to navigate the ever-changing financial landscape with a continuous source of loan income at high yields.¹

“Prior to Upstart, we had $2M in unsecured loans, and it was a challenge to continually approve unsecured loans since some would go bad and charge off. In a matter of five and a half months, we’ve done with Upstart what I didn’t think was possible, especially in tougher times,” Kuss said.